Question

An investor puts $600 in an account that pays 4% interest compounded annually. Find the account balance after 8 years

The account balance after 8 years is about
(Round to the nearest dollar as needed.)

Answer 1

$821.14

Explanation:

To solve this problem, lets use the compound interest formula:

`A=P(1+(r)/(n) )^(nt)`

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

The first step is to change 4% into a decimal:

4% ->
`(4)/(100)` -> 0.04

Next, lets plug in the values:

`A=600(1+(0.04)/(1))^(1(8))`

`A=821.14`

The account balance after 8 years will be $821.14